Is variance good or bad for stock investors?

July 7, 2024 No Comments

Variance is neither good nor bad for investors in and of itself. However, high variance in a stock is associated with higher risk, along with a higher return. Low variance is associated with lower risk and a lower return. High variance stocks tend to be

Knowing the Difference Between EE and I Bonds

July 7, 2024 No Comments

A: Both EE and I bonds are part of the U.S. Treasury’s savings bond program, which is designed to offer low-risk investments with tax advantages. Despite their similarities, Series EE bonds and Series I bonds are very different financial products in practice. The EE bond program is

Learn to Calculate Yield to Maturity in MS Excel

July 7, 2024 No Comments

A: In order to understand yield to maturity (YTM), we first need to discuss how to price a bond in general. The price of a traditional bond is the present value of all future cash flows the bond delivers (interest payments), plus the repayment of principal

Macaulay Duration vs. Modified Duration

July 7, 2024 No Comments

A: Macaulay duration and modified duration are mainly used to calculate the durations of bonds. The Macaulay duration calculates the weighted average time before a bondholder would receive the bond’s cash flows. Conversely, modified duration measures the price sensitivity of a bond when there is

Par Value Stock vs No Par Value Stock

July 7, 2024 No Comments

A: The par value of a stock is the stated value per share as outlined in the issuing company’s charter. Also called “face value” (because it’s the value printed on the face of a bond or stock certificate), the par value of a stock represents

Par Value vs Face Value

July 7, 2024 No Comments

A: When referring to the value of financial instruments, there’s no difference between par value and face value. Both terms refer to the stated value of the financial instrument at the time it is issued. Breaking It Down The par value of a bond can

Par value vs market value

July 7, 2024 No Comments

A: The valuation of financial instruments can be expressed a number of different ways. Two of the most important valuations are par value and market value. Par value, also called face value, refers to the stated value of the instrument at issuance. Market value, on

Repo agreements versus vs. reverse repo agreements

July 7, 2024 No Comments

A: A repurchase agreement, or repo, is a form of collateralized lending, while a reverse repurchase agreement, or reverse repo, is a form of collateralized borrowing. The collateral is most commonly U.S. Treasury securities, but may include other government bonds, agency securities, mortgage-backed securities, corporate

The difference between a bank guarantee and a bond

July 7, 2024 No Comments

A: A bank guarantee is a promise from a bank or lending institution that, if a borrower defaults on repayment of a loan, the bank will cover the loss. A bond is a debt instrument in which an investor loans money to a corporation or

The difference between fixed and current assets

July 7, 2024 No Comments

A: Fixed assets, also known as property, plant and equipment (PP&E), are tangible assets that a company expects to use for more than one accounting period. They are part of the non-current assets of an entity, and are different from cash and other current assets

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